The State

GOP Groups Fined in Donations Case

Campaign committees violated the law in 2002 in accepting funds for candidates.

SACRAMENTO — Three Republican organizations have agreed to pay $30,000 for helping to funnel nearly $1 million in insurance money to Republican legislative candidates in 2002, a state watchdog agency has announced.

Attorneys for the Fair Political Practices Commission do not recommend sanctions on the donor, 21st Century Insurance Group, or the California Republican Party, which helped direct the donations. Neither violated the law, said attorneys involved in the case.

The state's attorneys reached the accord with Republican campaign committees in Butte, San Joaquin and Kern counties, requiring that each pay $10,000. They violated campaign law when they accepted donations from 21st Century in excess of $25,000 -- the limit on contributions made to such committees and earmarked for candidates -- and parceled them out to candidates.

The full Fair Political Practices Commission will vote on the proposed settlement next week. Steven Russo, the commission's chief of enforcement, said Tuesday that the settlement, is "the end result of the investigation; this is end of the line."

The insurance firm donated $950,000 to the state GOP and 15 county Republican committees on Oct. 21, 2002. If 21st Century had made the contributions one business day earlier, it would have been required to publicly disclose the gifts before the November election. As it was, the company was not required to disclose them until January 2003, long after the election had been decided.

Democratic candidates said that if they had known insurance company money was being used against them, they might have tried to make it an issue. The late influx of money also caught Democratic campaign consultants unaware, leaving them little time to react by shifting more money into the tight races.

The candidates did report receipt of the money before the election. Sources of the donations that appeared in public filings were listed as county Republican committees -- not an insurance company.

The FPPC investigation did not focus on the issue of public disclosure. Rather, investigators homed in on three committees that gave more to candidates than state law permits. The Kern, San Joaquin and Butte county committees took $150,000, $50,000 and $40,000 respectively. State law caps donations to such committees at $25,000 to aid candidates. The county committees, in turn, gave donations to a half-dozen candidates, who won their races, helping Republicans make their first gains -- two seats in the Assembly and one in the Senate -- since 1994.

In 2003, a company spokeswoman explained in an interview with The Times that 21st Century intended to help Republican candidates, and relied on state GOP leaders to recommend when and where to place its donation.

The GOP strategy, a party spokesman said at the time, was to keep the $950,000 infusion secret from Democrats.

Vigo "Chip" Nielsen, attorney for 21st Century, said Tuesday that the company did nothing wrong. "It is not the donor's responsibility to audit how the money is spent," he said. "You presume that they know how to spend it."

Attorney Tom Hiltachk, representing the state and county Republican committees, said Tuesday that the committees "did the best they could" to comply with a complicated law.